Breaking News
0

Corporate investors pile into electric vehicle startups

TechnologyJan 11, 2019 04:05PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A Chevrolet Volt plug-in hybrid vehicle is being charged at Stewart Chevrolet in Colma California

By Paul Lienert

DETROIT (Reuters) - Corporate investors from outside the auto industry are placing increasing bets on electric vehicles, vying with automakers and suppliers to bankroll startup companies working on everything from advanced batteries to charging devices and all-new EVs.

Some 250 startups involved in some aspect of electrification have attracted more than $20 billion in venture capital, notably from a broad array of corporations across multiple industries, according to a Reuters analysis of publicly available data.

"Electrification will set off a number of economic changes in the traditional value chain in and around vehicles," said Reilly Brennan, managing director of San Francisco-based Trucks Venture Capital.

Because of those changes, in addition to funding EV development, investors see revenue opportunities in related markets, such as consumer products and home energy, Brennan said.

Such opportunities are underpinned by steady improvements in lithium-ion batteries' energy, prompting forecasts for a surge in fleet electrification amid global efforts to fight fuel consumption and emissions from traditional internal combustion engines.

Big oil companies such as BP (LON:BP) PLC and Royal Dutch Shell (LON:RDSa) PLC see EV-related investments partly as a hedge against dwindling demand for fossil fuels for privately owned vehicles, according to venture investor Evangelos Simoudis, managing director of Synapse Partners.

But they also see an opportunity to provide electric vehicle charging at fuel stations that now dispense gasoline and diesel.

Simoudis, who advises corporate executives on new mobility innovation strategy, said aerospace companies have a vested interest, too, in startups working on advanced battery systems: "Boeing (NYSE:BA) and Airbus are both working on electric planes."

Large telecommunication companies such as Verizon Communications Inc (NYSE:VZ) will play a role in connected electric vehicles, while semiconductor makers such as Intel Corp (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) Inc see their computer chips being used in an increasing number of applications in future electric and self-driving vehicles, Simoudis added.

Far and away the most active corporate investor in electrification so far is Intel, which has backed battery startups Prieto, Qnovo and Enovix and charging startups WiTricity and Chargifi.

Global automakers are heavily invested in battery startups. The field includes General Motors Co (NYSE:GM), BMW AG, Daimler AG (DE:DAIGn), Renault SA (PA:RENA), Nissan Motor Co, Hyundai Motror Co and SAIC Motor Corp.

Outside the auto industry, corporate investors in battery startups include technology companies Samsung Electronics (KS:005930) and Motorola Solutions Inc (NYSE:MSI) and energy company Schlumberger NV (NYSE:SLB).

Dozens of the startups focused on EV charging and infrastructure have been funded by many of the same corporate investors, including Chevron Corp (NYSE:CVX) and ABB AG (ABB.UL).

The greatest interest from investors, however, is in EV startups. There are more than 50 globally, including several high-profile and well-funded Tesla (NASDAQ:TSLA) wannabes based in China.

Corporate investment in China's startups has come from big Chinese companies such as automaker FAW Car Co and battery maker Contemporary Amperex Technology Co, which have backed Byton; automaker Zhejiang Geely Holding Group [GEELY.UL] and technology firm Baidu Inc (NASDAQ:BIDU), which have funded WM Motor, and internet giant Alibaba (NYSE:BABA) Group Holding, which has invested in Xiaopeng Motors.

In the United States, GM and BMW have backed Proterra, the electric bus maker, while Caterpillar Inc (NYSE:CAT), which is best known for heavy construction machinery, has invested in Henrik Fisker's latest electric vehicle project, Fisker Inc.

Corporate investors pile into electric vehicle startups
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email